This invention relates to the field of computer systems. More particularly, a system and methods are provided for automated splitting of a financial transaction into multiple categories.
Financial transactions (e.g., purchases, investments) often involve single payments for multiple items or purposes. For example, at a retail store a customer may engage in a single transaction for an array of goods. Or, an investor may make a single disbursement to a brokerage for investments in multiple stocks or funds.
People who track their financial activity (e.g., with accounting or other financial management software) often wish to categorize their transactions in order to track their expenses, help plan or adhere to a budget, or for some other purpose. However, their software may not support split transactions or, if split transactions are possible, may make it difficult or time-consuming to record a split transaction.
Splitting a transaction involves splitting the total value or amount of the transaction among multiple categories, wherein the portion of the transaction assigned to each category characterizes the purpose or goal of that portion of the transaction. Thus, the illustrative retail transaction mentioned above could be split among the categories of goods the customer purchased (e.g., electronics, clothing, household goods).
With many financial management software programs, to split a transaction a user may be required to manually identify every category involved in a transaction and separately enter or configure each category's portion of the transaction. Each user must start afresh, even if his or her buying pattern matches a pattern exhibited by multiple other users.
Some financial management programs are capable of downloading transaction data from a credit card issuer, an investment firm or other repository of transaction details, thereby alleviating a user of some effort. However, these programs typically do not have access to line-item data that describes or characterizes every individual purchase or element of a transaction. Therefore, in these programs transactions are still often recorded under a single category. That single category may indeed be correct for a portion of the transaction, but may mischaracterize other portions. Thus, a single entry for a shopping trip to a large retailer may be categorized under “clothing” even though some or even most of the purchases were not related to clothing.